Biden Admits That Sanctions Are Ineffective and Cost Us Money

President Biden on Thursday made two big admissions about the US-led economic sanctions on Russia. The first is that the sanctions will lead to food shortages for many countries other than Russia, and that this is simply the price that Americans ought to be forced to pay. 

The second concession was that sanctions have failed to modify Moscow's policies, and that "sanctions never discourage" the targeted state from waging war.

So, this week, Biden has kindly explained not only why sanctions haven't actually deterred Moscow, but also that Americans should pay more for food in order to keep sanctions that don't work.

These disclosures come after the White House and Biden allies repeatedly claimed that sanctions would dissuade Russia from launching or maintaining an invasion of Ukraine.

Furthermore, the White House has repeatedly understated the impact of sanctions on American households' living costs. (Of course, the reality that sanctions may be disastrous to poor countries is disregarded.)

So, as Biden has stated, sanctions do not work and will only make you poorer. We must, however, keep them in place.

What Exactly Did Biden Say about the Cost of Sanctions? 

After attending a meeting of G7 and NATO leaders on Thursday, Biden said food shortages "are going to be real." He then added "The price of these sanctions is not just imposed upon Russia, it's imposed upon an awful lot of countries as well including European countries and our country as well." 

Of fact, these "costs" include not only food but also energy and a variety of other things. Oil prices are still hovering around a ten-year high.

It's worth noting that Biden acknowledges that the sanctions are a major influence in the impending shortages. Supporters of sanctions, on the other hand, have made it a habit to assert that the only thing limiting food availability is the Russian invasion. Yes, the invasion reduced food production in Ukraine, but it is evident that US-led sanctions will reduce food supply in dozens of African countries, many of which rely largely on Russian grain.

North America, fortunately for Americans, is a food-exporting zone, and the United States is a net food exporter, despite the fact that Americans consume more calories than any other country. In other words, when it comes to their diets, Americans are far from subsistence. Obesity, not malnutrition, is the norm in the United States. However, the cost of living in the United States will be influenced. Because of the central bank's inflationary policies, which drove overall price hikes up to about 8% pre-Ukraine War, we should expect food prices to rise above what we might have expected.

This is because, despite the fact that the United States exports food, the sanctions will raise global food costs more, forcing many of our trading partners to dedicate more of their resources to food acquisition. For trading partners in the items that Americans buy, this entails lower production and investment. As a result, American consumers will face reduced availability and higher pricing.

If Sanctions Don't Work, Why Bother? 

Biden's admission that sanctions "never deter" contradicts weeks of claims by White House officials who have insisted that sanctions would force Russia out of Ukraine. For example, Kamala Harris claimed "the deterrence effect of these sanctions is still a meaningful one" and Deputy National Security adviser "Daleep Singh said "Sanctions are not an end to themselves. They serve a higher purpose. And that purpose is to deter and prevent."

Moreover, in February, National Security adviser Jake Sullivan said “The president believes that sanctions are intended to deter ... [a]nd in order for them to work — to deter, they have to be set up in a way where if Putin moves, then the costs are imposed.”

The fact that White House has been forced to change it's story has highlighted in a short period of time how the sanctions have already failed to achieve their goals. In an effort to explain away the failure, Biden then claimed in a rambling response that he never said sanctions deter anything: 

Let's get something straight. If you remember, if you have covered me from the beginning, I did not say that in fact the sanctions would deter him. Sanctions never deter. You keep talking about that. ... Sanctions never deter. The maintenance of sanctions. The maintenance of sanctions. The increasing the pain, and that's why I asked for this NATO meeting today, is to be sure after a month we will sustain what we're doing not just month, the following month, but for the remainder of this entire year. That's what will stop him.

So, according to the new party line, sanctions haven't deterred Russia from doing anything, but they will eventually create enough hardship to pull Russia out of Ukraine. This is merely more wishful thinking from the White House, as evidenced by the failure rate of economic sanctions.

Sanctions have a poor track record of fulfilling their declared goals of forcing policy changes in targeted regimes, as we documented at mises.org. This is due to the fact that targeted regimes are more likely to increase sanctions rather than comply with punishing governments. To put it another way, nationalism has greater clout than the economic hardships imposed on the targeted countries. Another roadblock to success is that if the United States wishes to implement truly effective sanctions, it will need practically universal agreement from other countries. Other states will supply several lifelines to the targeted regime if there is no such collaboration.

This is something we've previously witnessed in Russia. Germany has steadfastly refused to halt Russian energy exports. A new "Mexico-Russia friendship" caucus is being formed by Mexican parliamentarians from the ruling party. To get over US restrictions, India is currently negotiating a new rupee-ruble trading agreement. Of course, China claims that it will do whatever it wants.

This everything fits the standard economic sanctions script and demonstrates why they fail. What's astonishing is how swiftly the White House has been forced to recognize both that sanctions have failed to achieve their claimed goal of deterrence, and that the White House thinks it's fine to shrug and say, "Hey, food shortages are simply the price you little people have to pay!" Given sanctions' ineffectiveness and the harm done to third parties, it's time to accept reality and move on.

Instead of intentionally undermining peace, Washington would pursue a negotiated settlement and ceasefire energetically if it truly intended to end the violence.

=====